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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (42190)	4/7/2011 2:41:32 AM
From: Asymmetric	Read Replies (1) \| Respond to of 78520

Thanks for your thoughts Paul. Just got thru reading an article that argues Japanese stocks aren't as cheap as one would think because the yen is overvalued by approximately 15%. Not sure how that value was arrived at or that the methodology was valid. I like your idea on Korea. I was there with family last year on a vacation and they appeared a young, prosperous nation with a very hardworking population. Very competitive in autos, steel and electronics. I think the one area where competitors may really pick up a lot of business is in electrical equipment. If Hitachi and Mitsubishi manufacturing are hampered due to rotating blackouts, then GE, Siemens, and ABB can pick up a lot additional business. I may be off base, but I don't think the Koreans are as strong in that particular area. - A.

To: Paul Senior who wrote (42190)	4/8/2011 10:39:59 PM
From: Spekulatius	2 Recommendations Read Replies (4) \| Respond to of 78520

re Japan. You could be correct with your dire view on Japan. I do have some exposure though work about what is happening in Japanese and it does not sound too good: The power shortage is crippling, there are rolling blackout though huge parts of the country. Rolling blackouts, which even hit the trains make it hard to keep production going and productivity is down. because of cascading effects of damaged facilities, lack of transportation (trains down to the blackout) and plants operating with reduced productivity due to blackouts, there are part shortages everywhere. one company we work with has started to shift the complete activity including engineering to nights because there is more power available. These blackouts are going to last through the entire year. Tourism is basically ground to a halt and it will remain that way. For one thing, I believe that air conditions will have to be turned off and from what I heard, Japan in summer wo air conditioner is unbearable. Japan has to converse and curtail all non-essential power consumption and build new plants as quickly as possible. maybe they work out something with mobile diesel generators , I don't know. My guess is that they are going to build NG plants because those are fairly quick to build, much faster than coal plants or other sources. My other guess is that they have to keep the existing nuclear plants running for a long time, weather they like it or not. it is quite apparent that they had a very thing reserve margin even before the disaster and now the they a severe power shortage that is going to impact the economy. I still like my stocks like DMW (6365 pumps for energy industry and water and power utilities) as a cheap rebuilding play. Itochu, which is a trading house with an energy (coal) focus and very diversified operations should do OK, i'd venture to guess that coal imports into Japan will increase to and Itochu (8001) should benefit. Sakura Rubber (5189) is an extremely cheap play and also makes firehoses and safety equipment and may benefit from increased spending in that business. Sapporo beer might sell well if air conditioners don't work in Tokyo next summer. Besides that,the RE itself (assuming 5% cap rate) is worth 2x the Sapporo Holdings market cap, even when subtracting the substantial debt, that leaves me a margin of safety at current prices. Anyways another 10% lift and this one will be gone. Sumitomo Rubber (5110) is the weakest case at current prices - i sold 1/2 and the rest may be gone too very soon. Earnings will shrink this year, Rubber and crude input costs are way up, although I like that the tire companies are making no bones about increasing their prices nowadays. Toa Valve Engineering (6466) is down because 60% of their business is related to nuclear power (more than I thought when i bought this stock. However the PE is ~5 and the stock is a net net, the balance sheet is clean without any debt. The business with the failed plant is gone forever (not sure they had any in this plant) but they can't really stop maintaining the remaining ones, so I am guess that the nuclear business will be around for quite some time. Maybe they can do export business or build upon their remaining 40% of their industrial valve business. Competitor Okano Valve (6492) trades at a considerable premium to Toa and also is 60% dependent on nuclear power business, so at least I bought cheap. I am having some lowball bids on stocks that I like out, but we need a ~10% retrenchment before anything hit's Well that's my roundabout for now.